You Don’t Need More Deals... You Need THIS - David Richter

May 21, 2025

David Richter, co-author of Profit First for Real Estate Investing and founder of Simple CFO, shares strategies for real estate investors feeling cash-poor despite high profits. He discusses common cash management mistakes and the importance of effective financial clarity. Richter emphasizes the 'Profit First' methodology, advocating for creating multiple accounts to better manage cash flow. He also touches on the psychological aspects of financial decisions and the necessity of maintaining liquidity to ensure long-term success in real estate.

Ask episode

AI Snips

Chapters

Books

Transcript

Episode notes

INSIGHT

Investors Often Cash Poor

Real estate investors are often cash poor despite making paper profits due to poor cash management.
Many run their businesses like accidental nonprofits, spending more than they earn and lacking clarity on cash flow.

ADVICE

Use Multiple Bank Accounts

Open separate bank accounts for profit, owner's compensation, taxes, operational expenses, and income.
Use this system to give every dollar a specific purpose and gain clarity on your cash.

ANECDOTE

Ryan's 2018 Cash Crunch Story

Ryan Pineda struggled with cash flow while managing 70+ properties from a single bank account.
The 2018 market correction exposed how renovate-over-budget and slow sales can quickly drain cash reserves.

Get the Snipd Podcast app to discover more snips from this episode

Get the app

Profit First

Transform Your Business from a Cash-Eating Monster to a Money-Making Machine

Mike Michalowicz

In 'Profit First', Mike Michalowicz introduces a behavioral approach to accounting that flips the conventional formula from 'Sales - Expenses = Profit' to 'Sales - Profit = Expenses'. This system involves taking a predetermined percentage of sales as profit first and then allocating the remainder for expenses. The book provides practical, step-by-step advice and case studies to help entrepreneurs manage their businesses more effectively, ensuring early and sustained profitability and long-term growth.

Rich Dad Poor Dad

What the Rich Teach Their Kids about Money - That the Poor and the Middle Class Do Not

C.P.A. Sharon L. Lechter

Robert Kiyosaki

The book tells the story of Robert Kiyosaki's two fathers: his 'poor dad,' a highly educated but fiscally poor man, and his 'rich dad,' the father of his best friend who was a successful entrepreneur. It emphasizes the importance of financial education, distinguishing between assets and liabilities, and building wealth through investing in assets such as real estate and businesses. Kiyosaki argues that a good education and a secure job are not guarantees for financial success and provides practical lessons on how to make money work for you rather than working for money[1][3][5].

The Richest Man in Babylon

George Clason

This book, written by George S. Clason, uses a series of parables to convey fundamental principles of personal finance and wealth accumulation. Published in 1926, it remains highly relevant today, offering practical advice on saving, investing, budgeting, and financial discipline. The parables are engaging and easy to understand, making complex financial concepts accessible to readers of all backgrounds. Key principles include paying yourself first, living within your means, and making money work for you through wise investments. Despite its historical setting, the book's core lessons are adaptable to modern financial practices and have had a profound impact on countless readers worldwide.

The 7 Habits of Highly Effective People

Stephen R Covey

This book, first published in 1989, outlines seven habits that are designed to help individuals become more effective in their personal and professional lives. The habits are grouped into three categories: Private Victory (habits 1-3), Public Victory (habits 4-6), and Renewal (habit 7). The habits include being proactive, beginning with the end in mind, putting first things first, thinking win-win, seeking first to understand and then to be understood, synergizing, and sharpening the saw. Covey emphasizes the importance of personal integrity, effective time management, empathetic communication, and continuous self-improvement[2][5][4].

Profit First for Real Estate Investing

David Richter

Profit First for Real Estate Investing, written by David Richter, is a financial management guide tailored for real estate investors. It adapts the Profit First method, originally created by Mike Michalowicz, to the unique needs of real estate investing. The book provides a simple cash flow system that prioritizes profit allocation and disciplined expense management, helping investors to reduce stress and build a healthy and profitable real estate business. It includes practical steps such as setting up specific accounts, assessing financial health, and leveraging financial data to attract better deals and private lenders.